Quantum computers may eventually be capable of breaking Bitcoin’s security, but attempting to use it that way could be entirely pointless, according to multimillionaire entrepreneur Kevin O’Leary.
“If you’re going to take a quantum computer stack and dedicate it to cracking Bitcoin, is that the best use of the power and that facility, or is there another way to make money?” O’Leary says during an interview with Magazine.
“I’ve heard the narrative for almost six years,” O’Leary, dressed in his trademark black suit, says, brushing aside a long-held concern from the crypto industry.
The 71-year-old — known to fans of US reality television series Shark Tank as “Mr Wonderful” — says, in a deeply skeptical tone, that anyone hoping to profit from such an effort would first need to bet against Bitcoin itself, by shorting it, and genuinely believe that within the next three to five years, “you could actually crack it.”
Crypto industry divided over quantum’s threat to Bitcoin
Several industry executives have been saying for a while now that quantum computers — which utilize the principles of quantum mechanics to perform calculations — could eventually become powerful enough to crack Bitcoin’s security within the next decade.
Solana founder Anatoly Yakovenko has suggested there is a “50–50” chance that the risk could emerge as early as 2030.
However, several high-profile Bitcoin advocates,such as Blockstream CEO Adam Back, anticipate that Bitcoin will have preventative measures in place long before quantum is a real threat.
O’Leary is more neutral; he doesn’t dismiss the risk to Bitcoin, but argues that quantum computing would be far more lucrative when deployed in areas with greater economic upside, such as accelerating AI-driven medical research.
“I mean, that would be very useful,” he says. Medical researchers have recently echoed a similar sentiment, stating that quantum computers could help in designing more complex molecules and enhance treatment precision.
Bitcoin has already been priced in for quantum threat
Although there is no immediate threat to Bitcoin, O’Leary says that the quantum computing risk is already, to some extent, reflected in Bitcoin’s current price.
“The price of Bitcoin anticipates, whatever the probability of that is, that someone would make it their life’s work, and it would take a lot of years, we think, to find a way to crack it,” he says, as Bitcoin trades around $90,000.
It raised the obvious question for Magazine to ask: Is O’Leary hedging his bets against potential risk by investing in quantum computing stocks?
For now, he says they’re not on his radar.
“One of the problems is the challenge that they don’t make money. And so, you know, I prefer at the end of the day to get some cash flow,” he says, which is very on brand for O’Leary.
O’Leary reiterates his firm conviction in allocating 5% of his overall portfolio to Bitcoin, along with some exposure to Ethereum.
“I see the merit to blockchain,” he says. “We’ve been talking about blockchain and financial services for 12 years now, so I think that’s interesting. And then together, it’s diversified.”
However, O’Leary has little interest in the broader crypto market, saying the two largest cryptocurrencies provide all the exposure he needs.
“I don’t need much more. If we have a good day…I capture 97.5% of the upside with just two names. Like, that’s all I need,” he says.
O’Leary said that outside of Bitcoin and Ethereum, he has exposure to crypto through “picks and shovels.”
These include investments in crypto exchange Coinbase, brokerage platform Robinhood and crypto platform WonderFi, as they are “not agnostic to prices.”
“I like lots of volatility for those guys, because that’s how I make money,” he says.
Kevin O’Leary’s stance on crypto has changed significantly
O’Leary is one of the more well-known advocates for crypto in mainstream media, but his tone toward the asset class wasn’t always so nice.
In fact, it was downright negative only a few years ago.
As recently as January 2021, O’Leary had some nasty things to say about digital assets, referring to crypto as “crypto crap” and specifically calling Bitcoin “not a real currency” and a “giant nothing burger.”
But two months later, in March 2021, O’Leary did a complete 180-degree turn, announcing in a post on X (then Twitter) that he planned to allocate 3% of his portfolio to Bitcoin while exploring investments in environmentally sustainable cryptocurrency mining.
A month later, he said that Ether would always rank second to Bitcoin.
Unfortunately, O’Leary became enamored with crypto in the same year he became a paid spokesperson for FTX, which would become one of crypto’s most infamous collapses.
When the crypto exchange collapsed in November 2022, O’Leary soon realized that the deal was entirely pointless for him, and he claimed he had effectively lost the nearly $15 million that FTX had paid him for the role.
Who is Mr. Wonderful?
O’Leary has had an eye for promising startups, having been a founding member of Shark Tank, on which he has appeared since 2009.
Most recently, he became a strategic investor in Bitzero, a data center company focused on Bitcoin mining and AI computation.
“I’m just basically investing in it for infrastructure. It’s not really a Bitcoin mining company, in my view; I’m not investing in it that way because the power is far more valuable to the AI,” he says.
O’Leary said he was drawn to Bitzero because the company has secured land and long-term land leases, as well as power contracts priced below 6 cents per kilowatt hour.
Kevin O’Leary’s Bitcoin short-term forecast
As for where Bitcoin’s price is going, O’Leary doesn’t see much happening until the US government signs off on the CLARITY Act.
“I don’t think it’s going to close this year much higher than where it is,” O’Leary says, pointing to the price it was trading at publication, around $90,000.
“There’s no catalyst. We have to get the CLARITY Act signed,” he says.
“When that occurs, then you’ll start to see allocation at the sovereign wealth level, and then you’ll start to see price appreciation.”
However, he viewed the recent $19 billion crypto market liquidation on Oct. 10 favorably.
“A lot of leverage has been squeezed out of the models, which is good. I think what actually happened is very healthy,” he says.
“I’m holding onto my positions; they are down from the beginning of the year,” he says without any signs of concern.
“I’ve seen this movie so many times with Bitcoin, over and over and over again, and so volatility is its middle name. I’m good with it.”
Ciaran Lyons
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